IM Cannabis Shares Plunge 18.6% on Discounted $1.31M Offering Citing Financial Hardship

Shares of IM Cannabis Corp. (NASDAQ:IMCC) plummeted in premarket trading Wednesday after the medical cannabis firm announced a discounted registered direct offering to raise approximately $1.31 million, citing what it termed "serious financial difficulty."

Details of the Offering

IM Cannabis entered into securities purchase agreements to sell 655,000 common shares at a price of $2.00 per share, according to the company's statement. The offering is expected to generate gross proceeds of approximately $1.31 million before deducting fees and other estimated expenses.

The company, which has operations in Israel and Germany, stated that the transaction is anticipated to close on or about September 24, 2026. It intends to use the net proceeds for working capital and general corporate purposes.

'Financial Hardship' Exemption

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Significantly, IM Cannabis is relying on a "financial hardship" exemption under Canadian securities regulation (Multilateral Instrument 61-101) to proceed with the offering. This provision allows the company to bypass the standard requirements for a formal valuation and minority shareholder approval.

To use this exemption, the company's board of directors and at least two-thirds of its independent directors must determine that the company is in serious financial difficulty and that the offering is designed to improve its financial position. IM Cannabis also disclosed that one or more purchasers in the offering may be a related party.

Market Reaction

Investors reacted negatively to the dilutive offering and the company's financial distress signal, sending IMCC shares down 18.6% in premarket trading. The $2.00 offering price represents a substantial discount to the stock's previous closing price, a common catalyst for a sell-off as it reduces the value of existing shares. The offering is being conducted under an effective shelf registration statement on Form F-3, filed with the U.S. Securities and Exchange Commission in July 2025.